Romanian prime minister Marcel Ciolacu confirmed that local businessman Dorinel Umbrărescu, active in the road construction industry, will invest EUR 300 million to resume operations at the Otelu Rosu steel mill, which has been idle since 2013. The businessman reportedly paid EUR 12 million for the insolvent plant earlier this year.

The investment will create 600 workplaces, PM Ciolacu stated, quoted by Economica.net.

The company has an annual production capacity of 850,000 tonnes of liquid steel, but production has been stopped since 2013. It produces steel pipes with low, medium, or high carbon content and alloy steel for the subsequent lamination of reinforcing bars made of concrete, wire, and special steels.

The latest investor was planning (in 2019) to widen the product range with elements such as profiles for building structures, sections for shipbuilding, or railway sleepers.

With a history of over 200 years (the first forge was built by Frantz Martinschnitz in 1796), the steel mill Otelu Rosu followed after the fall of communism a path highly illustrative for Romania’s industry: sold (privatised) to Italian investors in 1999 for just USD 0.5 million (given the plant’s debts) it entered insolvency in 2003, and ownership has changed repeatedly while its assets were partly sold or simply deteriorate.

Laminorul Danube Metallurgical Enterprise (LDME), controlled by Sunningwell International Polska (and Omnisteel of Moldova since November 2022), is the last investor who attempted to revitalise the plant in 2019. However, the COVID-19 crisis, among others, prevented the recovery, and Otelu Rosu entered insolvency again in May 2023.

iulian@romania-insider.com

(Photo source: Gov.ro)